2024 (8) TMI 666 - AT - FEMA

SAFEMA property forfeiture upheld as tribunal rejects appeal challenging Aqdas Mahal building seizure

The Appellate Tribunal under SAFEMA dismissed an appeal challenging property forfeiture of Aqdas Mahal building in Mumbai. The tribunal held that SAFEMA ... Property forfeited under SAFEMA - Properties were also subject matter of TADA proceedings - HELD THAT:- The perusal of Section 8 reveals it to be distinct than the provision of SAFEMA and thereby the judgment of the Apex Court Amina Ahmed Dossa [2001 (1) TMI 1028 - SUPREME COURT] in reference to different statute cannot be applied. It is more so when even the facts giving rise to the case are different. If the Appellant and his relatives have filed declaratory suits before the Bombay High Court, it would have no bearing on the present proceedings but can be under TADA. Therefore, the first issue raised by the Appellant to challenge the impugned order is not made out. The forfeiture of property under TADA is to be dealt with as per the provision of TADA and would have no effect on the action taken as per the provision of SAFEMA. Validity of Notice under Section 6 of SAFEMA - obligation to first establish nexus between the income of the Detenue and the property in question - HELD THAT:- As per plain reading of Section 6 of the Act we do not find that the Competent Authority should have issued Show Cause Notice after showing link or nexus with the income of Detenue and property sought to be forfeited. If the argument is accepted, we would be virtually rewriting the provision, which is not permissible. The second issue raised by the Appellant is accordingly rejected. Violation of Principles of Natural Justice - principles of nature justice have not been followed because proceeding remain pending before many officers but decided by one posted on the date of hearing - HELD THAT:- In the instant case the final hearing was made by the Competent Authority on 23rd May, 2005 said to be for few minutes without any proof has resulted in pronouncement of order. It was by the same Authority. The written arguments itself show that the Appellant remain present on the date of hearing though said to be only of 10 to 15 minutes. It is however a fact that the order has been passed by the same Authority. Thus, arguments in reference to the principle of natural justice is not made out and therefore rejected summarily. Property in question - The property forfeited is a building known as Aqdas Mahal, Motlibai Street, Agripada, Mumbai-400001. The property has been acquired by natural guardian of the appellant by Indenture dated 28.09.1992 for the total consideration of Rs. 6,50,000/-. The entire transaction has occurred in a structured manner wherein consideration for the property was paid from the money advanced by way of loans to children. In absence of any loan agreement or documents to support the contentions of the Appellant, it remain unsubstantiated. Appellant has otherwise failed to refer to any material produce before the Competent Authority to disclose source for acquisition of property thus arguments in reference to the property cannot be accepted. Appeal dismissed. Issues Involved:1. Properties subject to TADA proceedings.2. Validity of Notice under Section 6 of SAFEMA.3. Violation of Principles of Natural Justice.Issue-wise Detailed Analysis:(i) Properties Subject to TADA Proceedings:The Appellant contended that the properties forfeited under SAFEMA were also subject to proceedings before the designated TADA Court. The TADA Court had released several properties involved in the impugned Show Cause Notice, and the Government did not appeal against this order. The Appellant referenced the judgment of the Apex Court in 'Amina Ahmed Dossa & Ors. v/s. State of Maharashtra' (2001 (2) SCC 675) to argue that the impugned order should be set aside. However, the Tribunal clarified that the provisions of SAFEMA are distinct from those of TADA. The Apex Court's judgment in Amina Ahmed Dossa was based on Section 8 of the TADA Act and Section 82 of the Code of Criminal Procedure, which are not applicable to SAFEMA. The Tribunal emphasized that the forfeiture of property under TADA would have no effect on actions taken under SAFEMA. Therefore, the first issue raised by the Appellant was not upheld.(ii) Validity of Notice under Section 6 of SAFEMA:The Appellant argued that the Competent Authority failed to establish a nexus between the income of the Detenue and the properties sought to be forfeited, referencing the Apex Court's judgment in 'Aslam Mohammed Merchants v/s. Competent Authority & Ors.' (2008 (14) SCC 186). The Tribunal noted that Section 6 of SAFEMA does not require the Competent Authority to show a link or nexus between the property and the income of the Detenue. The burden of proof lies on the person served with the Show Cause Notice to prove that the properties were acquired by lawful means. The Tribunal cited various judgments, including 'Attorney General for India v/s. Amratlal Prajivandas' (AIR 1994 2179 SC) and 'Union of India V/s. Champabai Devichand Saha & Ors.' (2011 (14) SCC 451), to support this interpretation. Therefore, the second issue raised by the Appellant was rejected.(iii) Violation of Principles of Natural Justice:The Appellant claimed that the principles of natural justice were violated because the proceedings were handled by multiple officers but decided by one. The Tribunal found this argument to be without substance, noting that the final hearing was conducted by the same Authority who passed the order. The Appellant was present at the hearing, and the order was pronounced by the same Authority. Therefore, the argument regarding the violation of natural justice was summarily rejected.Property in Question:The property in question, Aqdas Mahal, was acquired by the natural guardian of the Appellant for Rs. 6,50,000/-. The Appellant failed to provide any loan agreements or documents to support the claim that the property was acquired through loans to children. The Tribunal found that the Appellant did not produce any material evidence before the Competent Authority to disclose the source of funds for acquiring the property. Consequently, the arguments regarding the property were not accepted.Conclusion:The Tribunal dismissed the Appeal, upholding the Competent Authority's order of forfeiture under SAFEMA.